Volkswagen sets price level for Porsche’s IPO
Volkswagen said late Sunday that it planned to sell shares in Porsche, the luxury sports car brand it owns, at a valuation of up to $75 billion, setting the stage for one of the biggest stock market debuts of the year.
At that level, Porsche — maker of the 911 sports car and the Taycan electric sedan — would be valued at a higher level than German rivals such as BMW and Mercedes-benz.
The offering of Porsche on the Frankfurt Stock Exchange, months in the making, comes as volatile stock markets have chilled interest in initial public offerings. If the stock sale is completed, Porsche’s public offering would be one of the largest ever in Europe, according to Refinitiv.
It would return Porsche to the public markets for the first time in a decade, after Volkswagen bought the sports carmaker following a failed effort by Porsche to buy the much larger Volkswagen. Since then, Porsche had become one of Volkswagen’s most prized brands, reporting $3.6 billion in operating profit in the first half of the year.
The companies, whose decadesold histories are deeply intertwined, will retain strong ties after the stock offering. Volkswagen will retain a majority stake in Porsche, and the two automakers will share a CEO, Oliver Blume.
Volkswagen said in a statement that it aimed to sell about 25% of Porsche’s preferred shares at $76.50 to $82.50, potentially yielding as much as $9.4 billion in proceeds. Volkswagen has already secured as investors in the offering the sovereign wealth funds of Qatar, Norway and Abu Dhabi, as well as the money-management firm T. Rowe Price.
And the Porsche and Piech families — who trace their roots to the founding of Porsche and are collectively Volkswagen’s biggest shareholder — have agreed to buy a 12.5% stake in the sports carmaker at 7.5% more than the offering’s price.
That could yield as much as $10.1 billion more for Volkswagen.
About half of proceeds from the public offering would be paid out as a special dividend to Volkswagen shareholders.